Directors: Reckless Trading and Personal Liability in the Time of Coronavirus
The COVID-19 pandemic and its ongoing economic fallout have left many businesses struggling with cash flow and even viability challenges. The result is that an increasing number of companies are either trading in insolvent circumstances, or in grave danger of doing so. Reckless trading and your risk of personal liability To quote from the Companies Act (section 22(1)): “A company must not carry on its business recklessly, with gross negligence, with intent to defraud any person or for any fraudulent purpose.” And per section 77(3) any director “is liable for any loss, damages or costs sustained by the company as…